Card games – the Hindu BusinessLine
The RBI’s action on MasterCard, preventing it from onboarding new domestic customers from July 22, reminds multinational financial services entities to follow the rules. While these entities want to make the most of the large market offered by a young workforce with increasing income levels and aspirations, they have been found to be failing when it comes to complying with changing demands. regulations. Although the RBI ordered all payment system providers in 2018 to move the storage of all data – including transaction details, information collected from customers, and payment instructions – to servers in India, MasterCard was found to be non-compliant. The six-month period initially granted to comply with the rules has already been stretched to three years, and there was no reason for the central bank to continue to take a benevolent attitude.
Payment systems involving debit and credit cards have experienced tremendous growth – a compound annual average rate of 35 and 33 percent in volume and value, respectively, over the past 10 years. With this rapid growth comes the added responsibility of monitoring transactions to ensure that user privacy is not compromised and that the payment channel is not misused for illegal activity. As these payment systems are highly dependent on technology, it is necessary to adopt robust safety and security measures. The central bank needs unimpeded prudential access to data stored with these system providers, intermediaries and third-party providers. Such access is only possible if the data is stored on land. With actions taken against American Express Banking Corp and Diners Club International in May this year for the same reasons, the central bank is sending a signal that it is no longer willing to compromise on the violation of its regulations.
This skirmish offers the Center the opportunity to further develop the domestic card – RuPay. According to the RBI, countries with national cards have made better progress towards the cashless economy. Since its launch in 2017, RuPay’s share of the total number of cards issued in India has increased from 15% to 60%; he currently enjoys 30 percent of the value of the transaction. While the basic ecosystem for RuPay cards is in place – with all banks on board the platform, around 30 lakh merchant terminals being activated by RuPay and 90,000 online merchants with a range of offerings. catering, shopping, entertainment, etc. users that the card is not good enough for middle and high income people. The NPCI can work to improve the rewards programs and the fee structure to be on par with MasterCard and Visa. In addition, the brand perception of the RuPay card needs to be improved, so that it is seen as a viable alternative by all. This will put competitive pressure on multinational payment system providers to better follow regulations and further improve their offering and pricing structure.